Ball in West Coast longshoremen's court as PMA submits best and final contract proposal

The Pacific Maritime Association (PMA) said yesterday it submitted an "all-in" contract offer to the International
Longshore and Warehouse Union (ILWU) in an effort to end a nine-month stalemate that has prevented ships from unloading
their imports and has left exports sitting (and in the case of some perishables, rotting) because their goods can't get
moved out of terminals.

In a statement broadcast yesterday on PMA's website, Jim McKenna, the group's president, warned that a "coastwide meltdown
is a week or two away." Ships remain anchored in harbors and cargo is piling up inside terminals due to an alleged ILWU work
slowdown since the end of October at several key West Coast ports, according to PMA. Although management has not explicitly
said so, it hinted that the first employer lockout of workers since 2002 is possible if the union doesn't accept the five-year
contract proposal and the ports begin what will be the slow process of resuming normal operations. McKenna said management could
no longer tolerate paying full wages and benefits and watch workers deliberately slow down the flow of commerce at the 29 ports
where ILWU provides representation.

ILWU President Robert McEllrath struck a somewhat conciliatory tone, saying in a statement that a deal is within reach and that
the "few issues that remain can be easily resolved." McEllrath pledged that ILWU will keep the ports open and warned that "closing
the ports at this point would be reckless and irresponsible." However, McKenna said in a statement that as of yesterday the two
sides have been unable to "bridge the considerable gaps" between them. He charged that the union has "made significant new
demands" in the talks, including seeking to change a long-held process for selecting arbitrators so it could remove those
arbitrators who rule against them.

PMA's offer calls for:

a 3-percent base rate increase for full-time workers

no change in health insurance coverage already considered one of the best in the nation, and

an 11.1-percent hike in the union's current maximum pension benefit.

This offer would bring the top-of-the-line payout to $88,800 per year. Management's proposal allows ILWU to keep jurisdiction
over the maintenance and repair of truck chassis equipment, a major victory for the union because PMA wanted to outsource the work
to nonunion labor. On Jan. 26, under the guise of a federal mediator, the two sides reached a tentative agreement on the chassis
maintenance issue.

The two sides have worked without the contract since the prior pact expired July 1. Normal port operations were maintained
through the summer and part of the fall. According to PMA, however, ILWU at the end of October began staging deliberate work
slowdowns by not making skilled workers, such as crane operators, available at terminals during peak periods. By withholding
the services of workers critical to keeping freight moving, the ILWU created bottlenecks that slowed productivity to a crawl,
according to PMA.

At the ports of Seattle and Tacoma, for example, terminal productivity was cut in half, PMA said. ILWU has blamed the
congestion on employer mismanagement of the chassis network that has resulted in significant equipment shortages. Steamship
lines, which used to provide chassis for free, have been exiting the business, leaving the provisioning, for the most part, in
the hands of private chassis pools. The transition has been difficult, according to all stakeholders.

Cargo backlogs have worsened as ships sit on the water with no place to offload their cargo. As of 7 a.m. Pacific time today,
24 vessels—18 containerships and six bulk ships—were anchored at the harbor outside Los Angeles and Long Beach, according to
Philip Sanfield, a spokesman for the Port of Los Angeles. At the Port of Oakland, five ships are at anchor and 11 are idling
beyond the Golden Gate Bridge, according to Mike Zampa, a port spokesman.

We could all use some positive news and thankfully we have some for you: Many signs are showing that the freight markets are starting to recover.
As we mentioned last week, April was one of the worst months for freight activity in over 26 years. But in looking at the data for May, we are starting to see a much...